The slope of an indifference curve is ____ and a movement along the curve causes the loss in marginal utility (MU) of one good to ____ the marginal utility (MU) gained from another good.
a. zero; maximize
b. positive; exceed
c. concave; reduce
d. negative; equal
QUESTION 2When a monopoly price discriminates, it charges the highest price to the group of buyers with the least elastic demand.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3Combinations of two goods along the indifference curve yield:
a. equal prices for the two goods.
b. equal marginal utilities.
c. the same total utility.
d. zero total utility.
QUESTION 4A monopoly can successfully price discriminate as long as there are no close substitutes for its product.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5An indifference map states:
a. indifference curves farther from the origin yield higher levels of total utility.
b. that the consumer's income varies with the level of the indifference curve.
c. indifference curves closer to the origin yield higher levels of total utility.
d. that the points on either parts of indifference curves are preferred to the midpoint.
QUESTION 6An argument in favor of price discrimination is that this pricing strategy permits some consumers who otherwise would be excluded from a market to buy a good or service.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7An indifference curve is:
a. downward sloping and concave to the origin.
b. downward sloping and convex to the origin.
c. upward sloping and concave to the origin.
d. upward sloping and convex to the origin.
QUESTION 8Monopolies may earn economic losses in the long run.
a. True
b. False
Indicate whether the statement is true or false
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